Neo Performance Materials and Hudson Resources Advance the Greenland Sarfartoq Rare Earth Project After Receiving Government Approval for License Transfer
April 24, 2023
Project Expected to Help Feed Neo’s Planned Rare Earth Permanent Magnet Production in Estonia for Electric Vehicle and Energy-Saving Specialized Motor Applications Markets in Europe
Vancouver, BC / Toronto, ON (April 24, 2023) – Hudson Resources, Inc. (“Hudson” or the “Company”) (TSX Venture Exchange “HUD”; OTC “HUDRF”) and Neo Performance Materials Inc. (“Neo”, TSX: NEO.TO) are pleased to announce that they have received approval from the Government of Greenland for transfer of an exploration license (“License”) covering a portion of the Sarfartoq Carbonatite Complex in southwest Greenland (the “Project”). Accordingly, Neo has completed the purchase of the License from Hudson for the agreed-upon compensation of US$3,500,000 (the “Transaction”). Hudson may under certain conditions receive additional compensation in the form of equity interests or a share of future sale proceeds.
The License will be transferred to Neo North Star Resources Inc. (“NNSR”), a special purpose entity established to fund exploration of the Project. NNSR is majority-owned by Neo with significant investment from Weston Energy III LLC, a portfolio company of Yorktown Partners LLC. NNSR has initiated exploration activities and intends to raise additional capital as necessary to complete its initial exploration program for the Project.
NNSR has also entered into an offtake agreement (“Offtake”) with Neo’s affiliate, NPM Silmet OÜ (“Silmet”) that gives Silmet rights to purchase up to 60% of the ore or mineral concentrate produced from the Project once it is in operation. The Offtake enables Neo to secure access to a long-term supply of rare earth materials and to further diversify its global rare earth supply chain. The materials procured under the Offtake will be used as feedstock for Silmet’s rare earth separation facility in Sillamäe, Estonia, which is the only industrial-scale, commercially operating rare earth separation facility in the Western hemisphere.
Silmet intends to produce magnetic rare earth oxides to supply raw materials for a new sintered rare earth permanent magnet manufacturing plant that Neo plans to build and operate in nearby Narva, Estonia. Accordingly, the Project and the Offtake are key elements of Neo’s “Magnets-to-Mine” vertical integration strategy.
The Project hosts a mineral deposit enriched in neodymium and praseodymium — two essential elements for rare earth permanent magnets. The Project is well situated for future development in that it is located just 60 kilometers from the international airport in Kangerlussuaq, is close to tidewater and a major port facility, and is adjacent to a potential source of hydroelectric power.